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Sunday, 16 December 2012

All branches of democracy need review

This article was published in The Malta Independent on Sunday - 16th December 2012

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This week we witnessed everything that is wrong with the democratic institutions of our country: Parliament, Cabinet and the Law Courts.

In Parliament, we witnessed a rare event when a back bencher broke his whip’s discipline, voted against the government in a crucial money bill and explained his vote in very clear terms of no confidence in the government. This, according to the Constitution, leads either to the resignation of the Prime Minister and the appointment of another MP to form a fresh majority, or to the dissolution of Parliament.

I felt it unfair that, given the historical significance of the event, the Speaker did not allow the MP concerned reasonable time to explain his conduct before the House. But what I find particularly strange is that the loss of a crucial money bill, and a strong declaration in parliament that a contrary vote was a vote of no confidence in government, did not trigger either the resignation of the Prime Minister or the immediate dissolution of Parliament. The decision to dissolve Parliament at a future date does not have precedent and goes against the immediacy demanded by article 76 (5) of the Constitution, which gives the Prime Minister three days in which to resign or request the President to dissolve Parliament.

The Constitution is not chewing gum. It has to be strictly adhered to in all circumstances, even if the governing party conveniently makes Christmas an excuse to delay the inevitable.

A further example of how our leaders manifestly lead by bad example and continue to put their own interests before those of the nation is the choice of the election date. Since at least 1992, we have always had the shortest possible 33-day election campaign. In the present circumstances, where the government has been forced to resign and is navigating into a new year without an approved budget, the need to go for the shortest possible election campaign is greater than ever.

Even if one were to accept that, for the sake of Christmas, parliament is dissolved and the election writ is issued on 7 January, there is no reason on earth why the election should not be held within 33 days – on 9 February. The excuse that only the 9 March date allows general and local elections to be held concurrently was just that, an excuse, and one that left the Prime Minister with egg on his face when it was pointed out that the law allowed local elections to be brought forward as well.

The country has been experiencing political instability for more than a year, since it was evident that the government had a shaky majority in parliament. We have seen a crescendo during which the government lost various non-crucial votes until the climax was reached when the budget vote failed on 10 December. Having established in unequivocal terms that the government has no majority in parliament, the national interest demands that we resolve the issue as quickly as possible by going for the shortest 33-day campaign as has been done in other, less-demanding situations. The decision to go for a 61-day formal campaign, following four weeks of political limbo over Christmas, clearly places the narrow interests of the PN ahead of the national interest.

Election campaigns cost money. A 61-day campaign costs twice as much as a 33 day one. Without a law for the funding of political parties in place, in spite of criticism from EU organs, the chronic democratic deficit, by which choices and policies continue to be influenced by “charitable’ donors, becomes more accentuated. A long political campaign gives the PN a better chance to recover their poll disadvantage through better funding and more expensive and extensive communications strategy. There is no doubt that the PN has better access to funding than Labour. The fact that no serious initiatives have been taken during their 25-year tenure to correct such democratic deficit is sufficient evidence that the status quo works in their favour. Through a longer political campaign they are now attempting to leverage this democratic deficit to their advantage.

Even the third branch of democracy was shaken this week. Yet again, we could hardly believe our eyes on seeing a senior member of the judiciary in the dock facing criminal charges sufficiently serious for the person to be kept under arrest. Coming so soon after similar events of some years back, also involving two senior members of the judiciary who were later found guilty and sentenced to prison terms, it reinforces the impression that something is seriously wrong and that, rather than these being isolated events, our judiciary system suffers from a recurrent and chronic weakness.

It would be too simplistic to argue that the weakness stems from the fact that the judiciary does not command a remuneration package that reflects its status and responsibility. Nobody forces anyone to become a magistrate or a judge and if anyone feels underpaid, the logical way out is to resign and seek new pastures elsewhere.

Frankly, I think the system is defective from the selection process to the monitoring of operations as much as to the loss of experience of members of the judiciary who are obliged to resign on reaching a certain age.
The selection criteria of very limited practising years of experience is an invitation for trouble. Those sitting on the bench have to be very mature, have to have had long practical experience and should have reached the stage in life where they are already economically comfortable and agree to sit on the bench more for the experience and prestige than for the remuneration. So I always find it inappropriate for lawyers still in their thirties to be given access to the judiciary with the prospect of spending 30 years or more as judges or magistrates. I would exclude the consideration of anyone under 50. Fifteen years is the maximum anybody can keep doing the same job and remain effective.

Secondly, there is scant, or at least non-evident, monitoring of the performance of judiciary members. Such performance evaluation should be built into the system in a continuous manner by having committees of retired judges vetting the sentences given by magistrates and judges for consistency, logic and legal appropriateness. Such committees should also pay special attention to excessive delays in sentencing and should have the authority to directly question the judge or magistrate involved about any such excessive delays and what needs to be done for each specific case to arrive at sentencing with the least possible further delay.

Thirdly, judges and magistrates should continue to retire at the age of 65 but their experience should not be wasted. By sitting on review committees as above explained, and continuing to be paid their full package for as long as they agree to do so, their experience can still be channelled towards making court procedures more efficient, streamlined, accountable and credible.

And what about the modern fourth branch of democracy? Central banks and financial regulators are gradually becoming the fourth branch of democracy as they enjoy independence from the executive in the implementation of monetary policy and, to a lesser degree, in the regulation of the financial industry.

The EU has just decided that regulation of systematically important euro-area banks, including a minimum of three banks from each euro-area country, is to be directly regulated by the European Central Bank (ECB).
This step buries the main reason why bank regulation was originally extracted from central banks and given to different authorities, in our case the MFSA. The main argument for such extraction was that bank regulation could conflict with the independence of monetary policy. The crisis of 2008 showed that, when push came to shove, central banks with the power to create money were the only institution capable of handling the crisis and that such handling creates bigger conflicts with monetary policy independence than if regulation had stayed with the central bank and possibly the crisis would have been spotted earlier and maybe avoided altogether.

What is now going to happen with our internal regulatory system? Are we still going to have the ECB regulating our large banks and the MFSA regulating the rest of the financial services sector, with the Central Bank of Malta acting as a go-between? This sounds very unwieldy. I was never in favour of migration of the regulatory function away from the Central Bank and I believe it is time to reconsider. The MFSA should continue doing whatever it is doing but the authorisation, monitoring and regulatory function should move back to the Central Bank.